Thursday, April 5, 2007

Gap Update

The good news is that published reports say Gap Inc. has started interviewing candidates for its vacant top spot. Egon Zehnder International, which has offices in San Francisco, Manhattan and other cities around the United States, has been hired to conduct the search. Gap also reportedly has formed an internal search committee to draw up its own list of potential candidates.

Meanwhile, Gap chairman Robert Fisher, who has been filling in as interim CEO since Paul Pressler was removed a few months back, has been formulating his own plans to put the company back on track. While the decision to shutter its 19-store Forth & Towne division has gotten the most press, I’m more intrigued by Gap’s plan to narrow its core division’s targeted age range, which has been from 18 to 35, but will now skew to an older demographic. Just how old remains to be seen.

I’m all for Gap narrowing its sights and defining its market. But in order to be successful at it, the chain will have to commit itself 100% to the undertaking. Its marketing and promotion, in-store displays and signage, along with the product, of course, will have to reflect the updated positioning. Everyone has to be on same page. Lately, Gap’s record in this regard has been not great.

Last summer, Gap sent out mixed signals, running a “Summer of Love” promotion that appealed mainly to nostalgic baby boomers while stocking its stores with merchandise that appealed to (and was sized for) a much younger demographic. I laughed when I heard a well-meaning but clueless young employee trying to explain exactly what the summer of love was to some young shoppers.

As for Gap’s current “boyfriend pants” promotion, it seems designed for a teenage audience. I’m hoping it represents the final vestiges of the old management team, a team that never could seem to decide on one overreaching, well-defined strategy.

The next chief executive of Gap will have a full plate, from figuring out what to do about Old Navy (whose stores, in some instances, are starting to look worse than Kmart) to deciding whether to go forward with piperlime, the company’s online shoe store (dealing with Fisher, who seems to enjoy being at the helm, may be another hurdle). But the biggest challenge by far, at least in terms of the overall corporate investment, lies with Gap. Before any type of overhaul, before investing in any more design talent, before launching any more media, it needs to work on something much more basic: its identity. Only when it figures out what it is and whom it wants to appeal to will the other pieces of the puzzle start to take shape.